When a Black Bear Diner franchise is transferred, what is the term of the transferee's franchise agreement limited to?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
7. TRANSFERS
7.1 By Franchisor
This Development Agreement and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall assume the
obligations of Franchisor hereunder and Franchisor shall have no liability for the performance of any obligations contained in this Agreement after the effective date of such transfer or assignment.
7.2 By Developer
- 7.2.1 If Developer is a corporation, limited liability company, partnership, or limited liability partnership, each principal of Developer with at least a ten percent (10%) equity ownership interest in Developer ("Principal"), and the interest of each Principal in Developer, is i
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
Based on the 2025 Black Bear Diner Franchise Disclosure Document, it does not explicitly state the term length of a franchise agreement after a transfer. The document does outline the conditions for a franchisee to renew their franchise agreement for an additional ten-year term, provided they meet specific requirements such as compliance with the agreement, maintaining possession of the approved location, completing necessary remodels, and executing the current franchise agreement.
Item 7.2.2 discusses the conditions under which a transfer can occur, including that the transferee must meet the franchisor's then-current requirements for new franchisees and must execute the franchisor's then-current form of franchise agreement. However, it does not specify the length of the term for this new agreement.
To fully understand the term length that would apply to a transferee's franchise agreement, a prospective franchisee should directly ask the franchisor about the specific terms and conditions that would be included in the then-current franchise agreement offered to transferees. This would clarify whether the term is the remainder of the original agreement or a standard new term.